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Issues & Actions

"Pension Reform" Initiative Filed with Attorney General

As San Jose Mayor Chuck Reed promised last week during a presentation to the conservative Hoover Institution think-tank, he and some of his fellow mayors have filed a new "pension reform" measure that threatens to undermine the promise made to firefighters, teachers, police officers, school bus drivers and other public employees by allowing their retirement benefits to be slashed in mid-career.

Mayor Reed and the mayors of San Bernardino, Santa Ana, Anaheim and Pacific Grove say they are aiming to put on the November 2014 ballot a measure that would allow reductions in the pension benefits that current employees would earn during the balance of their working lives.

The mayors claim the "Pension Reform Act of 2014" will give cities the flexibility to solve pension problems, but politicians, not public workers, have created the fiscal problems in several communities. These elected officials, and not the average California public pensioner – who receives $26,000 annually – should be held responsible.

Californians for a Secure Retirement (CRS), which CTA is a part of along with other labor unions, warns the public not to be fooled by the politicians' assertions about the language in the ballot measure. It would reduce the benefits of current employees and future employees.

Unlike more than 400 other jurisdictions in the state that have addressed their pension challenges, these politicians would rather wage an expensive political fight funded by special interests that will result in less retirement security for millions of Californians.

The measure will cost taxpayers millions of dollars in expensive lawsuits at a time when the state Supreme Court has already ruled it illegal to cut promised retirement benefits.

There are many policy and legal issues that will need to be researched to realize the full scope of the initiative, but one particular section will have a significant impact on CalSTRS. Read our Key Points on retirement security.